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Comparing Apples with oranges

Apple has announced it has sold three million units of its New iPad since last Friday.

This has been characterised by Apple as ‘the strongest iPad launch yet’. It’s now available in Australia, the US, Canada, France, Germany, Hong Kong, Japan, Puerto Rico, Singapore, Switzerland, UK and the US Virgin Islands and will be available in 24 more countries starting next Friday.

In the light of the current debate around local camera pricing and offshore/online retailers, it’s worth taking note of local pricing of Apple’s New iPad versus US pricing:

The new iPad Wi-Fi models are available in black or white for a recommended retail price of $539 inc GST for the 16GB model (US pricing is US$499 ex tax, or A$469), $649 inc GST for the 32GB model (US pricing is A$564 ex tax), and $759 inc GST for the 64GB model (US pricing is A$658 ex tax).

If we add 10 percent to the converted US price to account for the local GST, local pricing works out to be only around $20 – 30 higher than US pricing, depending on the model.

It would be easy to take this pricing as further proof that local camera pricing by some leading brands is seriously awry: ‘If Apple can do it, why can’t, say, Canon?’ However, this would be like comparing Apple with oranges: This is a company which enjoys massive gross profits. By comparison, the camera market is fiercely competitive, with many near-equal competitors making the kinds of margins fierce competition allows.The market leader, Canon, does not dominate the market like Apple does with iPads and iPhones respectively. It’s this unique position which allows Apple the luxury of arranging world pricing so elegantly.

That is, Apple’s margins are so wonderfully fat it can arrange pricing around the world to be more or less equal, and still take a good profit wherever it distributes. Everyone pays over the odds with Apple – whether you are in Sydney or Cincinnati! But Apple is special.